DTN Closing Grain Comments

General Comments:

Corn was down 2 1/4 cents in the September contract and down 2 1/4 cents in the December. Soybeans were up 1/4 cent in the September contract and up 1/2 cent in the November. Wheat closed down 17 1/4 cents in the December Chicago contract, down 17 1/4 cents in the December Kansas City, and down 13 1/4 cents in the December Minneapolis contract. The September U.S. dollar index is down 0.13 at 95.85. December gold is up $11.30 at $1,195.50 while September silver is up 6 cents and September copper is up $0.0370. The Dow Jones Industrial Average is up 94 points at 25,763. October crude oil is up $0.06 at $65.27. October heating oil is up $0.0141 while October RBOB gasoline is up $0.0292 and October natural gas is down 0.001.

Corn:

December corn closed down 2 1/4 cents at $3.76 1/2 Monday after a weekend of rain benefited crops in the western Plains and moved to the central Corn Belt on Monday. The seven-day forecast remains mostly favorable for crops with moderate temperatures and broad rain coverage expected across the central and eastern Corn Belt. For now, USDA's recent crop estimate of 14.59 billion bushels stands until proven otherwise and has a chance to grow larger with the favorable weather expected in late August. On the demand side, USDA said 43.2 million bushels of corn were inspected for export last week, putting the old-crop total slightly below a year ago and short of USDA's estimated export pace with just two weeks remaining. With a large fall harvest expected, December corn is likely to stay under pressure and, for now, the trend remains sideways. DTN's National Corn Index closed at $3.33 Friday, still above its low in 2018 and 31 cents below the September contract. In outside markets, December gold is up $11.30 after Venezuela sharply devalued its currency on Friday. Other commodities are mixed.

Soybeans:

November soybeans ended up 1/2 cent at $8.93 1/4 Monday, surviving the bearishness of rain in late August with help from the anticipation of Chinese officials coming to Washington to talk trade on Wednesday and Thursday. It is fair to say that no one knows what will come out of this week's talks, if anything, but there is hope China may be willing to back down from its 25% soybean tariff, as Chinese importers typically need U.S. soybeans from October to February. Otherwise, this week's rains came at a good time for row crops and are likely to reinforce USDA's estimate for record production of 4.59 billion bushels in 2018. Early Monday, USDA said 23.5 million bushels of soybeans were inspected for export last week, enough to keep total inspections in line with USDA's export estimate for 2017-18. Normally, we would expect November soybean prices to experience bearish harvest pressure with a record crop on the way. That still seems likely, but trade policy with China remains a big unknown factor in the equation. For now, the trend in November soybeans is sideways. DTN's National Soybean Index closed at $8.09 Friday, up from its lowest price in over nine years and priced 83 cents below the November contract.

Wheat:

December Chicago wheat closed down 17 1/4 cents at $5.62 1/2, nearly erasing Friday's gain as rain in the southwestern U.S. Plains and a three-euro loss (-1.4%) in Europe's price of December milling wheat pressured prices lower. Much of Friday's gain came from unconfirmed news that Russia is considering putting a limit on grain exports this season; Russia's government denied making such a statement. The news may or may not be true, but shows how wheat prices are jumpier in this year of dry weather and lower world production. Shortages of wheat don't seem likely in 2018-19, but the U.S. may be positioned for increased exports later in the season. For now, the export pace is not encouraging as Monday's report showed total wheat inspections down 38% in 2018-19 from a year ago. Weekend rains showed good coverage across Kansas, Oklahoma, and the Texas Panhandle -- three areas that will be planting winter wheat next month. December Minneapolis wheat also closed lower Monday, down 13 1/4 cents, but the forecast remains mostly dry for the northwestern U.S. and western Canadian Prairie in the week ahead with red flag warnings in Washington and Idaho. All three wheat prices are struggling to trade higher, but for now, the trends remain up. DTN's National SRW Index closed at $5.32 Friday, 28 cents below the September contract and near its high in 2018. DTN's National HRW Index closed at $5.46 Friday, also near its highest price in 2018.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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